In favoring Middle East ally, U.S. glossed over human rights record

WASHINGTON/MUSCAT, Dec 21 (Reuters) - As the United States
negotiated this year's nuclear pact with Iran, the State
Department quietly agreed to spare the Gulf sultanate of Oman
from an embarrassing public rebuke over its human rights record,
rewarding a close Arab ally that helped broker the historic
deal.

In a highly unusual intervention, the department's hierarchy
overruled its own staff's assessments of Oman's deteriorating
record on forced labor and human trafficking and inflated its
ranking in a congressionally mandated report, U.S. officials
told Reuters. The move, which followed protests by Oman,
suggests the Obama administration placed diplomatic priorities
over human rights to pacify an important Middle East partner.

In the weeks leading up to publication of the State
Department's influential annual Trafficking in Persons (TIP)
report, top advisers to Secretary of State John Kerry
disregarded findings by its Middle East diplomatic bureau and a
U.S. government office set up to independently grade global
efforts to fight human trafficking, the officials said.

In April, diplomats in the State Department's Near Eastern
Affairs bureau and experts in the Office to Monitor and Combat
Trafficking in Persons agreed that Oman would be downgraded from
"Tier 2" to a status known as "Tier 2 Watch List", one notch
above a level that can incur U.S. sanctions, according to an
internal department memo seen by Reuters.

Oman, they agreed, had not done enough to improve the plight
of migrant laborers and domestic workers who make up a large
part of its expatriate community.

In June, when the final report is usually published, the
advisers to Kerry took an unusual step. They put the entire
382-page document on hold, two sources with knowledge of the
process told Reuters.

"Oman was the only hold-up," said a State Department
official, speaking on condition of anonymity.

In response to questions, a State Department official
declined to directly address Reuters' findings on the Oman TIP
process, saying that the department sought to make the report
"as accurate and objective as possible" for all countries.

The official said the United States speaks to Oman's
government on a variety of issues including trafficking, but
declined to comment on "private diplomatic discussions" or on
the recommendations by its trafficking experts and diplomats.

The TIP ranking, the official said, resulted from a
"thorough, deliberative process" based on year-round efforts by
U.S. embassies, foreign government officials, non-governmental
and international organizations to gather information on human
trafficking.

But the case of Oman illustrates how even a small country
that is strategically significant to the United States can win
concessions despite Washington's public insistence that it bases
its ranking system solely on human rights.

In its protests over the possible downgrade, Oman stressed
its broader strategic importance to the United States, according
to U.S. officials.

While it is not unusual for a country's ranking to be
contested between the State Department's human rights analysts
and political bureaus such as Near Eastern Affairs, high-level
intervention to change a ranking after those two parties have
agreed is extremely rare.

By the time this year's TIP report was published on July 27,
five weeks later than usual, Oman's ranking had been maintained
at "Tier 2".

"I'm not aware of a case where something like this has
happened before," said Mark Lagon, the TIP office's
ambassador-at-large from 2007 to 2009 and now president of
Freedom House, an advocacy group in Washington.

The reprieve has important implications. Watch List
countries are defined as those where the absolute number of
victims of severe forms of trafficking is "very significant or
significantly increasing", according to the State Department.

Without showing measurable progress, countries on the Watch
List for two straight years are automatically downgraded to the
lowest Tier 3, a rank that can trigger sanctions and is shared
by some of the world's worst abusers of human rights, including
North Korea. Many countries lobby the State Department hard to
avoid that designation or to prevent approaching that status.

A Western diplomatic source said he believes Kerry is
"protecting Oman when it comes to this issue," referring to
human trafficking. "John Kerry has a good personal relationship
with (Oman Foreign Minister) Yusuf bin Alawi and a good feeling
towards Oman. So he doesn't want to see Oman downgraded."

Kerry's press office declined to directly address whether he
deliberately shielded Oman in the latest TIP report. A State
Department official who took questions about Kerry's role said
the secretary made all the decisions on TIP rankings, including
Oman's, "based solely on the content of the report produced by
State Department staff".

"We stand by the integrity of the process," the official
said.

A Reuters investigation published on Aug. 3 revealed a high
degree of "grade inflation" in this year's
rankings.

An unprecedented number of diplomatically sensitive
countries such as Malaysia, China, Cuba, Uzbekistan and Mexico
wound up with ratings higher than recommended by the State
Department's own human rights experts.

In the aftermath, lawmakers have questioned at congressional
hearings whether this year's report was politicized, an
accusation the State Department denies.

BACK-CHANNEL TALKS

Oman, a trusted U.S. ally in a strategic location at the toe
of the Arabian Peninsula, prides itself as a stable presence and
mediator in a region beset by conflict. The country of 4 million
people has a "good neighbor" policy with Iran and close
relations with the West.

Its ruler, Sultan Qaboos, orchestrated secret U.S.-Iran
contacts that began in Muscat in 2012, leading to the first
formal talks between the United States and Iran since the 1979
Islamic Revolution and helping to pave the way for July's
nuclear deal, a legacy-defining foreign-policy achievement for
President Barack Obama.

Oman has also won U.S. favor in other ways, including
helping to secure the release in 2011 of three American hikers
held by Iran and taking in prisoners from the U.S. military
prison at Guantanamo Bay in Cuba. In recent months, Muscat has
also helped facilitate the release of American hostages held in
Yemen and has assisted in Syria diplomacy.

But it has faced criticism by rights groups over its
trafficking record. Many victims are from India, Pakistan and
Bangladesh. Rights groups have reported complaints including
unscrupulous recruiters, confiscation of passports by employers
and physical abuse.

"The sultanate continues to work hard on TIP issues and we
take this very seriously," Badr Albusaidi, secretary-general of
Oman's Ministry of Foreign Affairs, told Reuters. "When problems
are identified, for example a pattern of underage domestic
servants coming from a particular country, we intervene
actively."

He added that Oman was constantly working on "improving
hotlines, care centers, public information and education, and
agency coordination." He said if Oman were downgraded, it would
be "unfair and unreasonable".

UNUSUAL TREATMENT

Oman has protested its trafficking ranking in the past. When
it was downgraded in 2008 to Tier 3, it demanded a retraction,
suspending all contacts with the United States on human
trafficking issues and threatening to reassess its relationship
with Washington, according to diplomatic cables published by
Wikileaks.

That impasse was resolved when Oman was given a special
60-day grace period to make specific improvements in its
anti-trafficking activities and was then elevated to a higher
tier.

U.S. embassy officials held a series of meetings beginning
in December of last year with the Omani Foreign Ministry, giving
the Omanis "a working paper" to shore up their anti-trafficking
efforts, an Omani source close to the matter said.

The U.S. diplomats initially said they did not want to
downgrade Oman because of "strong ties" but "they were not
convinced that Oman was taking practical steps," said the
source.

In those meetings, the Omanis made their case not to be
downgraded. The government in Muscat then asked its embassy in
Washington to make "diplomatic attempts" to head off a
downgrade, the Omani source said.

The final TIP report was handed down from the State
Department building's seventh floor, where Kerry and other top
aides work, U.S. officials said.

It acknowledged Oman's shortcomings in fighting human
trafficking, saying Muscat had "decreased minimal
anti-trafficking law enforcement efforts" and "made inadequate
efforts to identify and protect victims" over the previous year.

The report also described Oman as a "destination and transit
country for men and women, primarily from South Asia and East
Africa, subjected to forced labor and, to a lesser extent sex
trafficking."

But it said Oman was making "significant efforts" to comply
with minimum standards, even though its investigations of
trafficking cases decreased to five from six the previous year
and its sex trafficking convictions fell to two from five.

Ahmed al-Mukhaini, an analyst and former assistant secretary
general for Oman's Shura council, or consultative national
assembly, said efforts against human trafficking seem to remain
a low government priority.

"We don't have sufficient capacity where people can seek
recourse to assistance," he said, citing issues such as workers
fleeing their employers and a high suicide rate among
expatriates.
(Editing by Stuart Grudgings)